You have 10 free articles left this month. Get your freeBasic subscription now and gain instant access to more.

Liberty House interested in Bosnia's ailing Aluminij - report

Author Iskra Pavlova
Liberty House interested in Bosnia's ailing Aluminij - report Photo: Fena

SARAJEVO (Bosnia and Herzegovina), September 4 (SeeNews) - UK-headquartered industrial and metals group Liberty House is said to be interested in Bosnia's ailing aluminium producer Aluminij, local media reported.

Liberty House representatives will visit Bosnia this week and meet the prime minister of the country's Federation entity, Fadil Novalic, to discuss the future of Aluminij, news portal reported on Tuesday, quoting the Federation's energy minister, Nermin Dzindic.

According to the same source, China Machinery Engineering Corporation (CMEC), which has already indicated its interest in Aluminij, is conducting due diligence at Aluminij. 

Moreover, an unnamed Dubai-based investor is also still interested in the troubled aluminium producer, according to the media report. 

Mostar-based Aluminij shut down operations on July 10 after its power supply was cut off due to swelling unpaid bills. Following the shutdown, the Federation government decided that Aluminij should continue to operate and come up with a rescue plan in the next six months. During that period no one will be able to block the company's bank accounts or launch bankruptcy proceedings.

In July, British-Swiss company Glencore terminated its talks with the Federation government for taking over Aluminij after it failed to reach an agreement on the electricity price for the cash-strapped company.

Aluminij has been one of the largest electricity consumers in Bosnia, accounting for a quarter of the electricity consumption in the Federation when operating at full capacity. The company has been in persistent trouble over high prices of electricity and raw materials. News daily Dnevni Avaz reported in June, citing the results of an audit conducted by KPMG, that at the end of April Aluminij had an overdue debt of 280 million marka ($158 million/143 million euro) to state-controlled power utility Elektroprivreda HZHB.

Aluminij employed 900 people and had numerous suppliers and other cooperating units, including Croatia's Adriatic port of Ploce, with the Mostar-based company engaging 20% of the port's capacities.

The Federation government controls 44% of Aluminij, followed by the government of neighbouring Croatia with 12%, with the remainder held by smaller shareholders.

The Federation is one of two autonomous entities forming Bosnia and Herzegovina. The other one is the Serb Republic. 

(1 euro = 1.95583 marka)